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25EVOLUTION OF THE DEFINITION «INNOVATION» IN THE ECONOMIC SCHOOLS THEORY
C.e.s. Gureev P. M.
Russian Federation, Moscow city, the State University of Management
Abstract. The article describes the process of innovation as an object of scientific research in the schools of different directions. There are differences between the concepts imitation, invention and innovation.
Nowadays the definition «Innovation», as a rule, includes «the most general and significant characteristics, indications, connections and relations of innovations creation and realization»[22]. However, it is necessary to note, that there is not a univocal treating of the definition «innovation» in the world. The fact that till present there is no univocal understanding of the definition «innovation» is proved by the quotation from the authoritative American journal "Economist": "For the last decade the innovation has come out of shade to become a new industrial religion that is worshipped by public figures, investors and businessmen. In the whole world the innovative rethoric unites politicians in all spectrum having changed the after war language of "wealth economy". The corporation board members consider innovations as a key to increase profit and share at the market. The government throws away money trying to stop the economy failures. But even being the cause of about 50% total economic increase and the topic of endless government researches the innovation still remains black magic "[26].
In Russian economy science there is no unity in treating the term «innovation» either. Different schools depending upon the research goals and object under the innovation understand as process [13], so as the process result [32], as well as process and process result (the term polysemy) [15]. At the same time, part of the country's government attitude to this problem is rather odd. So, in particular, the state secretary of the Economic development Ministry of Russian Federation O.V. Fomichev in his interview to the information-analytical portal «UNOVA» said: «Actually, there is not a legal definition of «innovation»... And as a matter of fact, I do not see any problem in absence of the exact definition» [39]. All this leads to applying the innovation terminology in the absence of a definite idea of its content and also absence of innovation realization criteria [16].
To give a more exact definition «innovation» it is necessary to study the evolution of this notion that «it is more correctly determined by a logic chain "imitation - invention - innovation"» [22].
In practice an innovation, as a rule, is a useful imitation that is in developing and realization others' ideas. In his works Peter Drucker called such an imitation creative and the people who were busy with such activity - creative imitators that is those who «do not invent a product or service but improve and place them»[9]. Drucker's opinion is much similar to an American economist's approach, Theodore Levitt, one of the modern globalization founders who thought that «not in all innovations there is novelty, this is rather imitation. Most Innovation products have an imitative character»[29]. Professors of the Stanford University C. Jackson Grayson, jr. and Karla O'Dell call «creative imitators» «chasers» and note that they «do not simply copy the leader's ideas but the y adjust them to their peculiarities, improve them and much sooner realize them in the market »[12]. But all mentioned above scientists believe that the imitative strategy of innovation realization is no less efficient than the strategy of an innovative product.
It is necessary to note that between notions "innovation" and "invention" are often treated equal equating them.
Invention is a technical or intellectual structure that has principal novelty [40] that is this is a new method or new technical task solutiono. In the economy theories of early schools the term «innovation» referred to inventions in industrial and agricultural spheres.
Since the moment of diffusion (commercialization) beginning the invention has become an innovation hence it acquires a new quality that is revealed in the innovation lag course. Such approach gives a chance to draw the following conclusions:
1. Invention is making a new conception;
2. Innovation is singling out practical value of the invention and turning it into a successfully sold product [20].
You should take into account that these conclusions are true for a narrow circle of innovations that is for food and technological innovations.
In ХХ century new scientific schools appeared that determined the further development of the innovation theory. «Two scientific schools formed their basic features in the first threshold of the century «Russian cosmism» and «Russian cyclism» received their recognition as in the country so as out of the country and became the cornerstone of the new scientific paradigm... At the end of the century they had their second wind and recognition, grew into theories that formed new vision of rhythmically pulsing nature and society, became the scientific ground for programs of practical actions and for foreseeing future in the rapidly changing world»[38].
«From the scientific point of view cosmism means cosmogony, that is using theories of Universe's birth and evolution» [25]. N.F. Fedorov is thought to be the founder of the Russian cosmogony who formulated «philosophy of common case». «The Russian cyclism was formed on the basis of Russian cosmism which is recognized in the world as its logical continuation» [38].
The founder of the «Russian cyclism» school was economists Mikhail Ivanovich Tugan-Baranovsky. The school followers are such well-known scientists as A.L. Chizhevsky, V.I. Vernadsky, A.A. Bogdanov, P.A. Sorokin.
The role of innovations in the cyclic character of macroeconomic indications in entrepreneur activity was defined by N.D. Kondratiev who formulated the conception of long-term fluctuations in economy and connected the leap from cycle to cycle with a wave of innovations and inventions [21].
The representative of the Ausrian economy school J. Schumpeter introduced in the scientific usage the term «innovation» as a new economy category that under the innovation implies either product or industrial process, or process arrangement on condition that they are new and applied. For a long time the basis of the definition «innovation» has been the one suggested by J. Schumpeter.
The works of academician RANS Y.V. Yakovets initiated the development of the Russian innovation school. In the frames of this scientific:
- the classification by the novelty principle is developed;
- the notion of innovation cycle is introduced;
- the mechanism of technical innovation applying is studied;
- the deferential income form scientific-technological activity is classed a stimulus of invention application.
The theory of innovations had its main development in 1990s. At that time the President of the International Economy Association Robert Sallow, who formed his scientific views under supervision of Nobel Prize winner on Economy V.V. Leontiev, together with American economist Recktenwald prize winner P.M. Romer developed models of economic growth with endogenous and exogenous technological progress.
Nowadays it is generally accepted the thesis that the financial result of innovative activity is first-priority for economy development and innovations are defined as a global trend of the world economic and technical development.
The evolution of the innovation theory is shown in fig. 1.
In the works of Russian scientists in the sphere of innovations and innovative management such as V.M. Anshin [1], S.Y. Glazyev [11] А.А. Dagayev [80], S.D. Ilenkova [19], A.I. Prigogina [30], R.A. Fatkhutdinov [10] different directions of innovation theory development are given that are characteristic for the Russian innovation school which «divides innovations into technical-technological, organizational, managerial, economic, social, legal and ecological » [22], where «innovations find their place in the technological sphere, in technologies development and process of enterprise and management organization»[30].
Summing up all said above about the definition «innovation» one can make a conclusion about discrepant enough opinions and single out the most frequently used approaches to understand innovation essence (fig. 2).
To the first group one can refer researchers and practitioners of the innovative activity who define innovations as business management tool that is something bringing to success in business. Here is the thesis that innovations are rather economic or social phenomenon than technological one [9].
The main definitions of the notion «innovation» that refer to this group are given in table 1.
R. Sallow, P. Romer
Y.V. Yakovets, BN. Kuzyk, A.I. Ageev, VI Kushlin, A.N. Folomiev
b
ÍHarvard school, Chicago school
i Modern Russian innovation school
A.L.
Chizhevsky, V.I. Vemadsky. M.I. Tugan-Baranovsky, A.A.
Bogdanov, P.Sorokin, N.D.
Kondratiev
J. Schumpeter, G. Mensch, L.F. Mizes
3
K. Menger, W.S. Jevons
K. Marx, F. Engels
A. Smith, J.B. Say, D. Ricardo, D.R.
McCulloch, D. Mill, N.W. Senior
F. Kane, L. Walras, M. de La Riviere, E. Condillac
Q de Sismondi, A. de Saint-Simon
q F
Marxist political economy
Utopic socialism
A. Serra, I. Pososhkov
Mercantilism
XV XVI XV
School
of
Russian
cyclism
XVIII XIX XX XX
Grounded innovations as main engine of future economy
A single theory of cycles, crises and innovations is formulated
Waves of inventions and innovations are connected with the transition to another cycle
The economic development is nothing 'but transition from one equilibrium state into
another under the influence of technical progress
Innovation is common good, valuable for the society
Capital and labor saving innovations are determined
Innovation is a result
of labor division, introducing the notion
of non-material product, beginning of the private ownership right of inventor
Representatives of innovation process are singled out into a separate group
Primary principles and elements of the
innovative infrastructure are developed
The idea to develop industry with the state's money and then give bulks of industry into private sector is propaganded
Fig. 1 - Evolution of the innovation theory
Fig. 2 - The classification of approaches to innovation definitions Table 1 - Definition of the notion «innovation» as a business management tool
Author Definition of the notion «innovation»
PR. Whitefield, R.T. Lapier Using new types of tolls or new principles of tolls use; applying new technological process or new procedure; applying new type of raw material or material; using new place or territory not known before; doing new activity [7]
B. Twiss The process in which an invention or idea acquires an economic sense [37]
B. Santo The social-technical-economic process that at the end leads to creation of unique or better by their technical characteristics products or technologies and if the innovation is oriented to profit then its realization brings additional income [33]
P.F.Drucker The specific toll of enterprising is an action that gives resources new possibilities of making riches [9]
F. Nikson A complex of technical, industrial and commercial actions leading to appearing new improved goods in the market [27]
A.S. Batrutdinov The commercialization of the scientific results research directed to efficiency increase of economic and social relations in all society spheres through improving of the industrial process [4]
The second group or the researchers under the innovation understand a technical novelty (engineering idea, technical idea) that must be introduced into practice to increase the efficiency of the industrial process. To this group we can refer the following definitions:
- V.Y. Gorfinkel, V.A. Shvandar - «Innovation is a final result of introducing innovations in order to change the management object and receive economic, social, ecological, scientific-technical nor other type of effect»[5];
- D.V. Sokolov, E.I. Yurkan - «Innovation is a complex process of producing and using new knowledge for this enterprise»[35];
- A.A. Bekarev - "Innovation is a final result of the innovative activity that has resulted in new or improved product introduced in the market, new or improved technological process used in practice or a new approach to social services. Innovation is a materialized result received from the finance investment into new equipment or technology, new forms of labour industry organization, service or management, including new forms of control, account, methods of planning, analysis, etc."[4].
To the followers of this approach we can refer representatives of the Polish innovation school:
- B. Byrsky associates innovation with industrial production, especially with its equipment, technologies and products [7];
- Y. Muizhel - innovations are industrial applying of new technologies [26];
- K. Poznanski - innovations are «changes of produce and products methods based on new or not used before knowledge » [29].
The third group adepts suppose that innovations are means of the accelerated development not only of enterprises but also spheres and regions. So, for example, representatives of the Russian State Humanitarian University define innovations as «introducing innovations as objects, technologies, products and form of industry organization in the country's economy in the basis of which there are latest achievements of the scientific-technological progress and which qualitatively differ from their analogs» [31].
To the fourth group of the definition «innovation» we can refer the authors who understand innovations as a development process where under innovations they mean solving the technical problems that are introducing new technologies or novelties despite the sphere of their usage. For example, E. Hoffmeister thinks that under innovations one should understand conscious directed to reach the definite goal volition to transform the invention into a process or method or skillful introducing of the product to the market [17]. A similar understanding of the innovation is characteristic for P.N. Zavlina, A.K. Kazaktsev and L.E. Mindeli: «The notion of "innovation" is spread to the new product or service, the way of their production, novelty in the organizational, financial, scientific-research and other spheres, any improvement providing finance saving or creating conditions for such savings»[2].
To the fifth group of understanding the definition of «innovation we can refer the subject definitions that have been developed in different spheres of various activities. For example:
- Education is a specific form of education development management that allows a systemic change of the structure, content and organization of the educational; process in general [14];
- Financial-credit sphere under the innovation they understand «creation and spread of new forms and hybrids of credit and finance tools and operations, appearing of new types of account and service» [28];
- Sociology is a «phenomenon of the social life connected to the material-thing and spiritual activity of people in the process of which they make new objects of culture and also develop and master new types of producing different goods that have not existed before» [35].
Summing up everything said above we can make a conclusion that different economy schools consider innovation as follows:
1. Product;
2. Process;
3. Product and process at the same time (terms polysemy);
4. The activity result.
It should be noted that all definitions have specific common features:
- the innovation is connected with changes (progress or regress);
- it is necessary to introduce innovation into practice;
- the innovation is supposed to receive effect (positive or negative) that is the object change receiving the innovation.
It appears very disputable the point of view that has set firmly in the scientific circles that innovation is a materialized result of the innovation introduction process. Moreover, the thesis that innovation obligatory brings a positive effect is wrong and it has been proved by practice because most part of the introduced innovations give «negative» or «zero» effect. At the same time you cannot deny the fact that any introduced innovation leads to the change of the innovated object characteristics. The changed characteristics can show in changing the object structure or in its functional. This conclusion would appear logical because if as the result of the influence on the object there are no changes then such influence is neutral for the object and it is not innovative.
Taking into account the points of the general system theory that have an asymmetrical character we can state:
1. Any system must develop, the structural-functional characteristics of the system must change with the course of time;
2. In its development the system tends to self-preservation and stability, the change of the structural-functional characteristics of the system takes place not spontaneously but overcoming some system resistance as the result of managerial procedures realization;
3. In its intention to self-preservation and stability the system tends to minimize the effect of outer influence (fluctuation), to change the structural-functional characteristics of the system one needs a target (managerial) influence on the system;
4. In its tendency to minimize the fluctuation the system adjusts to it by changing the structural-functional characteristics or perceives the fluctuation as dysfunction and locates it; the change of the structural-functional characteristics of the system can be different;
5. The system adaptation to fluctuation (governing influence) has a dynamic character; the change of the structural-functional characteristics of the system is function of time;
6. The change of the system condition has a discrete character; the result of the process of the change of the structural-functional characteristics (innovative process) is a new system condition.
Thus, as the result of the innovation process in the system the change of the structural and (or) functional content takes place that is dynamic innovation changes take place leading to innovation appearing. So, the innovation process causes quantity and (or) qualitative changes in the system that further on become innovations. The criterion of the innovation appearance one can consider new system characteristics that arise and consolidate that is the system condition change.
Taking into account all mentioned above arguments we can formulate the definition «innovation» as follows:
Innovation is a change of the system condition that takes place because of the structural and (or) functional characteristics of the system at target (governing) effects on the system (the system elements).
We think that such a definition of «innovation» let us sufficiently eliminate an existing ambiguity in the definitions of the notion and also exclude issues of commercial success or unsuccess of innovations from the analysis object.
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